Even as much of the private market seems to be grappling with a slowdown, raising big funds seem to be en vogue.
Earlier this month, it was reported San Francisco-based Founders Fund had closed more than $5 billion in two new funds that will be dedicated to both early- and late-stage investing. Now Sequoia Capital China is said to be raising four new funds totalling $8 billion, per a report in The Information.
Sequoia China—whose most notable investment for folks in the U.S. may be ByteDance—has been busy of late, according to Crunchbase data. The firm made 171 investments last year—its most ever in one year. It already has made 31 thus far in 2022.
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News of the new funds seems to indicate Sequoia China is not afraid of some headwinds that are appearing in the market. Similar to the U.S., the Chinese stocks—especially tech—have had a rough go of it this year, with private companies now seeing valuations cut. Changes in regulations in both China and the U.S. also have made it difficult for companies to list in the U.S.—eliminating a potential exit option for investors.
The pace of regulatory change seemed to pick up after ride-hailing titan Didi went public on the NYSE, only to delist months later when the Chinese government said it would investigate the company on suspicion it had violated data privacy and national security laws—causing Didi’s shares to plummet.
On the other hand, the Asia venture market broke records last year, so maybe Sequoia China sees those headwinds as only a small blip in a much more lucrative story.
Illustration: Dom Guzman
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